So much for restoring trust in Canada’s regime for assessing the impact of major energy, mining and infrastructure projects.

Confirmation that Ottawa is seriously considering excluding new in-situ oil sands from the list of projects that would require a federal impact assessment review demonstrates that political horse-trading has already begun.

And there are also suggestions that offshore oil and gas projects could be next on the list for exemptions, once a project list is set in stone later this year.

Together, these examples of special treatment strongly suggest that politics is the achilles heal of the major regulatory shake-up proposed in Bill C-69.

The legislation now before Parliament, proposes to subsume the National Energy Board’s (NEB) regulatory oversight ofmost major oil and gas pipelines and electricity exports within the impact assessment process currently run by the Canadian Environmental Assessment Agency. The legislation also proposes to significantly broaden the factors that a project review must take into account — including environmental and social impacts, indigenous issues and traditional knowledge, climate change and gender, sustainability and adverse effects — while ensuring that Canadians have full access to the impact assessment process.

The Harper Conservatives had excluded most environmental and indigenous issues from the NEB’s regulatory oversight and shut out environmentalists and indigenous peoples, leaving a very narrow technical process of review — something the petroleum industry liked a lot.

Under C-69, a new Impact Assessment Agency (IAA) — the current Canadian Environmental Assessment Agency, reskinned — becomes the lead actor and the renamed NEB and the offshore regulatory boards merely name one or two members to the IAA’s five-member review panel for large projects.

The new assessment process has already been criticized by the oil and mining industries as being both too long and too complicated, thereby discouraging new resource industry investments. For environmental and indigenous groups, the new process is seen as not thorough enough.

Moreover, the resource industries, the environmental groups and indigenous groups are all concerned about what will ultimately be on the assessment agency’s project list.

There’s already suspicion and likely to be disappointment on all sides.

For example, the exclusion of oil sands projects, whatever the reason, will be controversial.

And on the east coast, the oil industry is pushing hard for offshore exploration projects to be excluded from review, while environmental groups want tighter rules to protect threatened right whales and other marine animals. And there are already suggestions that new offshore oil projects might be excluded altogether from the project list.

The rationale for excluding in-situ oil sands projects (ones that inject heated steam into the ground to extract the thick bitumen) seems reasonable enough, on the surface. Oil sands projects are normally regulated provincially and if greenhouse gas emissions is the only reason for a project to be reviewed, then as long as the projects are covered by Alberta’s climate change regime and fit within its carbon dioxide emissions cap, then Ottawa would be satisfied to provide an exemption.

Remember that Alberta Premier Rachel Notley worked closely with Prime Minister Justin Trudeau to forge the pan-Canadian climate deal, which set the stage for Ottawa’s carbon pricing regime.

Trudeau’s Liberals also gave the nod to the TransMountain pipeline expansion as a quid pro quo for Alberta putting in place its carbon pricing regime.

And the Prime Minister clearly wants to show that his government supports oil sands development and the construction of new pipelines to get that Alberta bitumen to tidewater and access to new markets.

But there are a few what-ifs

What if the NDP government loses power in Alberta and the Alberta climate regime is thrown on the garbage heap?

What if, despite best efforts, Alberta isn’t able to cap greenhouse gas emissions from the oil sands?

Does the federal government then add oil sands projects back on the impact assessment project list? That may be easier said than done, once a precedent has been set to exclude them.

And here’s another possible wrench in the gears: what if the Kinder Morgan TransMountain pipeline expansion doesn’t proceed, perhaps as a result of continuous delays due to court battles, provincial trouble-making, and weakening economics?

Any subsequent new pipeline expansion project would fall under the new impact assessment regime, complicated, lengthy and politically-driven as it will likely be.

And while the process would be open and transparent, given the strong emotions currently on display in British Columbia, the review would almost certainly be longer and more contentious than the previous NEB review.

Would opponents of a new expansion be satisfied that their concerns were heard, if at the end of the day the federal cabinet again gave the nod of approval because it wants to see bitumen move to the Pacific shore?

In the end, the federal Liberals might have bit off more than they can chew by tackling two major undertaking at the same time — a pan-Canadian climate change regime and a total remake of the impact assessment of major resource and infrastructure projects.

What’s worse, it now appears that not only are the two intertwined — climate change and regulatory assessment — but that politics, not fact-based regulatory assessment, rules supreme.

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Author

Jeff Carruthers is a retired award-winning business and energy journalist for the Globe and Mail, the Ottawa Journal and other newspapers in the then FP Publications chain.
During the 1980s and early 1990s, he was a senior executive at the DG and ADM level in the federal energy department and the department of supply and services.
He was Director of Government Information Services at Globe Information Services in the early 90s, followed by more than six years as Principle and then Partner at Sussex Circle, an Ottawa-based boutique strategic policy consulting firm. He also taught at Carleton University’s School of Journalism and Communications for more than 10 years.
He is currently a writer and market gardener on a small acreage near Elphin, Ontario.